Chapter 7 Product Selling Strategies That Add Value PDF

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Chapter 7 Product-Selling Strategies That Add Value

7.1 True/False Questions

1) Salespeople at the dealer level can play an important role in positioning an automobile for competitive advantage. Answer: TRUE Diff: 1 Objective: LO1

2) People buy products if they fulfill a problem-solving need. Answer: TRUE Diff: 1 Objective: LO2

3) Salespeople have assumed an important and expanding role in differentiating products. Answer: TRUE Diff: 1 Objective: LO3

4) Advertising directed toward a mass market is usually a good way to position a complex prod-uct. Answer: FALSE Diff: 2 Objective: LO3

5) In most cases, the same sales strategy is used to sell a new and emerging product as a mature, wellestablished product. Answer: FALSE Diff: 2

Objective: LO3

6) Mature and well-established products are usually characterized by intense competition as new brands enter the market. Answer: TRUE Diff: 2 Objective: LO3

7) Pricing decisions are made primarily during the introductory stage of the product life cycle and rarely change. Answer: FALSE Diff: 2 Objective: LO4

  8) A potential consequence of using low-price tactics is lower profits. Answer: TRUE Diff: 2 Objective: LO3 9) For a growing number of customers, short-term savings that result from low prices are more important than long-term value. Answer: FALSE Diff: 2 Objective: LO4

10) Today, the primary goal of the value-added concept is to add value by lowering the price of the product. Answer: FALSE Diff: 1 Objective: LO5

11) Value creation during the transactional sale is considerable. Answer: FALSE Diff: 2 Objective: LO5

12) The generic product is the basic, substantive product you are selling. Answer: TRUE Diff: 1 Objective: LO5

13) Positioning is the set of benefits and values the company promises to deliver to customers to satisfy their needs. Answer: FALSE Diff: 1 Objective: LO1

14) The value-added product exists when salespeople meet the customer's expectation. Answer: FALSE Diff: 1 Objective: LO5

15) Potential products are more likely to be developed by salespeople who regularly interact with customers. Answer: TRUE Diff: 2 Objective: LO5

 

7.2 Multiple-Choice Questions

1) Which term refers to the decisions and activities that are intended to create and maintain a cer-tain product concept in the customer's mind? A) feature dumping B) product positioning C) product configuration D) value clustering E) strategic marketing Answer: B Diff: 1 Objective: LO1 2) Product positioning is largely a function of: A) product expertise B) pricing strategies C) industry standards D) market segmentation E) product differentiation Answer: E Diff: 1 Objective: LO1

3) A value proposition is best defined as a: A) set of benefits a firm promises to deliver to satisfy customer needs B) demand-based model for structuring the marketing mix C) strategy for aligning features and prices D) firm's international positioning strategy E) function of long term production costs Answer: A

Diff: 1 Objective: LO2

4) The positioning process: A) must be continually modified to match customer wants and needs B) is a fixed value-added process conducted by the salesperson C) involves isolation from the competition D) is performed by the customer in the buying cycle E) should be performed every five years Answer: A Diff: 2 Objective: LO1

  5) Your ability to separate yourself and your product from that of your competitors is referred to as: A) positioning B) differentiation C) value processing D) product placement E) marketing alliance Answer: B Diff: 2 Objective: LO1

6) Creating a value proposition is a way of: A) choosing prices for products B) scaling prices to different markets C) positioning your product in the marketplace D) keeping your product on the same level as others in the market

E) choosing sales objectives that align with the firm's long-term goals Answer: C Diff: 2 Objective: LO1 7) Customer satisfaction most likely arises from: A) product price B) the product itself C) the company that makes or distributes the product D) the salesperson who sells and services the product E) a combination of the product, company, and salesperson Answer: E Diff: 2 Objective: LO2

8) Satisfactions can come from: A) research studies done on the product B) the board of directors of the company C) any company that makes a competing product D) the customer who buys the product E) the salesperson who sells the product Answer: E Diff: 1 Objective: LO2

  9) Becoming familiar with a customer's satisfactions is necessary for a salesperson to move from: A) transactional selling to product selling B) solution selling to value-added selling C) new buy selling to constructive selling

D) product selling to complimentary selling E) product selling to solution selling Answer: E Diff: 2 Objective: LO2

10) A good way to determine a customer's satisfactions is to: A) ask the customer questions about their needs B) find out what competitors are doing C) utilize a research database D) run statistical modeling E) conduct training sessions Answer: A Diff: 1 AACSB: Written and Oral Communication Objective: LO2

11) What is the most likely drawback of using too many technical terms during a sales presenta-tion? A) a salesperson making a misstatement B) the customer being too intimidated to purchase C) the customer knowing more about the product than the salesperson D) the customer wanting a product with fewer capabilities and benefits E) the customer asking the salesperson difficult questions that cannot be answered Answer: B Diff: 2 AACSB: Written and Oral Communication Objective: LO2 12) In order to bring the Walker Hotel and Convention Center up to industry standards, each guest room was redecorated with new wallpaper, drapes, carpeting, mattresses, and sofas. Mela-nie Simms, sales

manager for the Center, has recommended that guest rooms be upgraded with the addition of wide desks, free wi-fi, and 24-hour room service. From the viewpoint of most business travelers, these changes would result in the creation of a(n): A) potential product B) generic product C) expected product D) mature product E) value-added product Answer: E Diff: 2 Objective: LO5

13) Which of the following would most likely help a salesperson to position and differentiate a product as better than other products in the market? A) cost-benefit analysis worksheet B) ROI calculator C) competitive analysis worksheet D) analysis regression E) statistical model Answer: C Diff: 2 AACSB: Application of Knowledge Objective: LO2

14) The stages a product goes through from the time it is first introduced to the market until it is discontinued is called the: A) natural evolution B) amortization C) position D) product life cycle

E) specific feature Answer: D Diff: 1 Objective: LO3

15) Which of the following is a factor that determines a product's life cycle stage? A) the length of time the product sits in the warehouse before shipping B) the product's benefits and the importance of the needs it fulfills C) the competitors' compensation structure for salespeople D) changes in the product's production method E) the length of time a product has been around Answer: B Diff: 2 Objective: LO3 16) A salesperson would most likely use a CRM system to: A) categorize commission rates B) qualify potential sales leads C) file corporate bank records D) monitor competitors' customers E) send product information to customers Answer: E Diff: 2 Objective: LO5

  17) The goal of selling strategies for new and emerging products is to: A) encourage current customers to rebuy B) build desire for the product C) create customer relationships

D) sell more units at a lower price E) maintain consumer buying habits Answer: B Diff: 2 Objective: LO3

18) The goal of selling strategies for mature and well-established products is to: A) change buying habits B) build desire for the product C) maintain customer relationships D) sell more units at a lower price E) keep sales on an even level Answer: C Diff: 2 Objective: LO3

19) Which of the following statements about pricing policies is most likely true? A) Very few companies maintain a pricing strategy that focuses on meeting competition. B) Pricing strategies often reflect the opinion of the research department on correct pricing. C) The ability to offer the lowest price is the most critical factor in the sale of products. D) Price discounting is a competitive tool available to large numbers of salespeople. E) Transactional sales rely primarily on personality alignment between buyers and sellers. Answer: D Diff: 3 Objective: LO4

20) Which of the following is NOT a service-quality dimension? A) responsiveness B) assurance

C) durability D) reliability E) empathy Answer: C Diff: 2 Objective: LO1   21) Which service-quality dimension refers to the knowledge and courtesy of employees? A) responsiveness B) empathy C) reliability D) tangibles E) assurance Answer: E Diff: 2 Objective: LO1

22) Which type of price discount would most likely be offered by a ski lodge during the summer months? A) quality discount B) seasonal discount C) promotional allowance D) associate allowance E) functional discount Answer: B Diff: 2 Objective: LO4

23) Which of the following most likely covers transportation costs incurred by channel interme-diaries? A) seasonal discount

B) associate allowance C) trade discount D) promotional allowance E) quantity discount Answer: C Diff: 1 Objective: LO4

24) Low-involvement buyers care mostly about: A) specifications B) durability C) loyalty D) brand E) price Answer: E Diff: 2 Objective: LO4

  25) Money that a bank has available for customer loans would be an example of a(n): A) value-added product B) expected product C) generic product D) potential product E) customer product Answer: C Diff: 2 Objective: LO5

26) Research reported in the Harvard Business Review indicates that it is very difficult to build customer loyalty if a firm is selling only the ________ product. A) generic B) expected C) potential D) value-added E) sales Answer: B Diff: 2 Objective: LO5

27) Yellow Freight Systems must provide clean, well-maintained trucks and well-trained drivers. This is most likely an example of a(n): A) value-added product B) generic product C) potential product D) expected product E) customer product Answer: D Diff: 2 AACSB: Analytical Thinking Objective: LO5

28) As the level of competition increases, especially in the case of a mature product, salespeople should most likely consider future possibilities, known as the ________ product. A) expected B) potential C) generic D) value-added E) well-established

Answer: B Diff: 2 Objective: LO5

  29) Value creation investments are the highest in: A) strategic alliance sales B) transactional sales C) generic sales D) consultative sales E) collaborative sales Answer: A Diff: 1 Objective: LO5 30) When setting professional fees, which of the following should LEAST likely be considered? A) professional experience B) exclusivity of skills C) number of channels D) value to clients E) target market Answer: C Diff: 2 Objective: LO3

7.3 Short Answer Questions

1) Today's better educated and more demanding customers are seeking a(n) ________ of satis-factions. Answer: cluster Diff: 1

Objective: LO2

2) Products are born, and then they grow up and become mature. In marketing, this process is known as the ________. Answer: product life cycle Diff: 1 Objective: LO3

3) The first step in establishing a product price is to determine the firm's pricing ________. Answer: objectives Diff: 1 Objective: LO4

4) The authors of The Discipline of Market Leaders encourage business firms to pick one of the disciplines — best price, best product, or best ________ to distinguish their offering in the mar-ketplace. Answer: service Diff: 2 Objective: LO4

  5) The ________ product refers to what may remain to be done or what is possible. Answer: potential Diff: 1 Objective: LO5

7.4 Essay Questions

1) List and describe the three parts of the Product Solutions Selling Model. Answer:

1. Today's product meets and exceeds expectations by offering better quality, larger selection and/or new product improvements. 2. Today's salesperson acts as a partner by offering current product knowledge, awareness of the customer's needs and courteous service during and after the sale. 3. Today's company acts as a team to provide delivery and installation, orientation and training, quickresponse times, credit options and outstanding service. Diff: 2 Objective: LO1 2) Salespeople can benefit from viewing every product as being four-dimensional. List the four "possible" products. Answer: 1. Generic product 2. Expected product 3. Value-added product 4. Potential product Diff: 2 Objective: LO5

  7.5 Applied Multiple Choice Questions

Just Candles, a supply house for scented and unscented tapers and other ceremonial candles to houses of worship, restaurants, and other establishments, has experienced a downturn in business in the last two years. Upon investigation, the owner of Just Candles learns that the same candles that they sell are available from online retailers for at least 10% less. The firm will not be able to survive if customers continue purchasing from competing e-retailers. Just Candles maintains a storefront for selling candles but does not provide other services or products.

1) Which of the following would most likely enable Just Candles to recapture their previous cus-tomers and gain new customers? A) Just Candles could lower their prices on less popular candles to create "loss leaders" that would induce new customers to purchase regularly-priced candles from them.

B) Just Candles could shut down their retail location to cut overhead and move their business to the Internet, where they could charge lower prices and compete with other online candle retailers. C) Just Candles could send out a mailing to all their customers reminding them that they carry a full line of candles. D) Just Candles could move their store to a more visible and expensive location in the mall. E) Just Candles could announce a "candle of the month" program to discount candles that tradi-tionally haven't sold as well as their other candles. Answer: B Diff: 3 AACSB: Application of Knowledge Objective: LO1, LO4

2) Which of the following would most likely be a value-added strategy that could boost sales for Just Candles? A) eliminating most candle sizes to focus on only tapers B) visiting commercial customers to give them product brochures C) offering classes for new customers on decorating with candles D) lowering prices on all taper candles to compete with e-retailers E) selling to customers in the local area using a mass marketing campaign Answer: C Diff: 3 AACSB: Application of Knowledge Objective: LO1, LO5   A front desk clerk at a ReView Hotel receives a call from a ReView Gold Rewards Member guest complaining that the wireless Internet in her room is fading in and out. Without Internet access, she won't be able to make her deadline for this business trip.

3) What could the desk clerk do to maintain the guest's cluster of satisfactions? A) The desk clerk cannot do anything, as the desk clerk does not have the technical skills to fix the wireless connection.

B) The desk clerk should not do anything, as the desk clerk is not a salesperson and therefore does not have responsibility for creating the cluster of satisfactions. C) The desk clerk should offer to put the guest in an empty room as close to the original room as possible, to avoid inconveniencing the guest further. D) The desk clerk should offer the guest the use of the lobby wireless, which the clerk knows to be problem-free, along with a discount off the charge for the room. E) The desk clerk should refund the guest's full payment for the hotel room and find the guest a room at another hotel that can guarantee that its wireless service is problem-free. Answer: D Diff: 3 AACSB: Application of Knowledge Objective: LO2, LO5

4) Why is it most likely important to maintain this guest's satisfaction with the hotel and the front desk clerk? A) The guest is visiting the ReView Hotel during the off season and is paying a below average rate for the room. B) The guest is already satisfied with the wireless service, so her cluster of satisfactions will be maintained if she is also satisfied with the hotel and the front desk clerk. C) The guest's membership in the hotel's rewards club indicates a previous level of satisfaction that should be maintained by the front desk clerk to ensure customer loyalty. D) The hotel maintains exclusivity through various pricing levels and room features. E) The clerk is the only employee of the hotel with whom the guest will have contact. Answer: C Diff: 3 AACSB: Application of Knowledge Objective: LO2, LO3   5) Abco Realty owns several rental apartment buildings in a working class but safe neighborhood that has recently become popular with young professionals because of its proximity to an express commuter train line. Abco has recently invested in the infrastructure of the buildings, adding laundry rooms, safety features to the lobbies, and new insulated windows to all the units. Be-cause of this, Abco cannot afford to match the unit rental prices of other buildings that have not made improvements.

How should the sales manager of Abco Realty most likely differentiate Abco's units from units offered in other buildings? A) The sales manager can convince management to cut expenses on basic maintenance so the apartments can be rented at prices matching other buildings in the area. B) The sales manager can promote the neighborhood as a safe place to live with a rich history. C) The sales manager can convince the owners of the other buildings in the area to bring their rental prices up to the prices Abco charges. D) The sales manager can promote Abco apartments as being worth more money because they are safer and have more services. E) The sales manager can promote Abco apartments as being worth more money because the company has helped raise home values in the area. Answer: D Diff: 3 AACSB: Application of Knowledge Objective: LO1, LO5

A grain supplier to cattle farmers has developed a new grain mixture, Green Grain, with nutri-tional additives that approximate the nutrient mixture in grass. Farmers who feed their cattle this enriched grain can sell beef and milk that taste similar to grass-fed beef and have many of the nutritional benefits to humans of grass-fed beef or dairy at a significantly lower production cost than actual grass-fed beef or dairy.

6) What would be the best way to position Green Grain relative to traditional grain? A) as a higher-priced product that would allow farmers to make greater profits B) as a higher-priced product that is more socially responsible than traditional grain C) as an experimental product with which farmers could be the first on the market D) as a product that exceeds federal standards for cattle feed E) as a product that stores well throughout the winter Answer: A Diff: 3 AACSB: Application of Knowledge Objective: LO1, LO3, LO5

  7) Which product-selling strategy would most likely be LEAST effective for selling Green Grain? A) focusing on creating new markets B) developing new expectation levels C) establishing new standards D) stressing brand superiority E) changing habits Answer: D Diff: 3 AACSB: Application of Knowledge Objective: LO3 8) Green Grain marketers have established a positioning plan that stresses low price. Salespeople are expected to use transactional selling tactics and offer discounts and a...